Russian sanctions: the impact so far

The economic measures imposed on Russia following the invasion of Ukraine last month are already the largest package of sanctions ever imposed against a G20 nation, and there are more to come.

Before the invasion, more than 250 Russian individuals and entities were designated for an asset freeze. In the week afterwards, a little over 30 were added to the list of ‘designated persons’, but now the UK (and consequently Jersey) has imposed restrictions on hundreds more, including President Putin and foreign minister Sergey Lavrov.

Further steps are anticipated worldwide. The UK’s Financial Conduct Authority announced this week that firms are avoiding new investment in Russia and many plan to divest themselves of any assets when able to do so. Last week President Biden announced moves to revoke the ‘favoured trading partner status’, something the UK has echoed.

Furs, vodka, tyres, cement

As a result £900m-worth of goods as diverse as fur, vodka, tyres and cement will be subject to a 35% increase in UK tariffs.

The Treasury said it would also no longer issue any new guarantees, loans and insurance for exports to Russia.

The eventual impact of this is unclear – Russia’s main trading partner is China, although Germany is the second largest – but it demonstrates that in this conflict economic measures are making the headlines alongside the details of the conflict itself.

‘Asset freezes’ of property, jets and superyachts have garnered most of the attention, but the sanctions include travel bans on these designated persons, as well as other restrictions on the Russian banking system (to name two, Russian banks can no longer clear payments in sterling, and transactions with the Central Bank of the Russian Federation, Russian Ministry of Finance and Russian National Wealth Fund are all prohibited).

The sanctions list

Details of those subject to an asset freeze are listed by the Office of Financial Sanctions Implementation (OFSI). As part of the unified approach, which continues to be taken by Jersey and the UK, all persons (legal and natural) named on that list are subject to sanction by Jersey.

Any defined financial institution in Jersey is legally obliged to report to the Minister for External Relations if they so much as suspect that a breach of financial sanctions has occurred, or if a person attempting to do business locally is a designated person.

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